Can eToro’s GoodDollar Give A Man His Proverbial Fish?

There is a Chinese saying授人以鱼不如授人以渔(shòu rén yǐ yú bùrú shòu rén yǐ yú) that basically means teaching someone to fish is better than giving someone fish. I would argue however, that for a starving man, without first getting nourished on fish, that lesson in fishing would be a gratuitous, superfluous offering. This is the fundamental tenet of Universal Basic Income (UBI), to provide a guaranteed basic income for every individual who needs it, so that basic subsistence types of considerations will no longer hold back any individual’s potential or hinder his or her pursuit of a more fulfilling life.

Arguments for and against UBI abound on both sides of the fence, with opponents dismissing it as a model of waste and unearned rewards but supporters have pointed out that the data actually indicates the opposite, as can be seen in a number of UBI projects around the world – the ‘Mincombe Experiment’ in Manitoba, Canada, the ‘SIME & DIME in Seattle and Denver, the ‘Big Pilot Project’ in Namibia, to name a few. The data is clear – giving people who need money and a bit of hope a leg up encourages most people to decide to lead better lives, make smarter decisions and you can well imagine the widespread effects this would have on a macroeconomic level.

The crux of the matter for me, though, has always been about the implementation. So how will UBI be calculated and provided, considering the cost of basic necessities varies from city to city, state to state, country to country and there is of course massive global disparity in GDP per capita? How will a fair system of distribution work? Can governments and organizations be trusted to manage these sums of money with accountability?

The GoodDollar Experiment

At the recent Blockshow Asia, I sat down with eToro’s Managing Director Asia, Jasper Lee, to catch up on what was new with the pioneer social trading platform and the one standout from our conversation was the GoodDollar experiment.

Funded by eToro (USD 1 Million), the non-profit GoodDollar project was launched at the Web Summit in Lisbon last month but was actually conceived of as an idea 10 years ago by eToro CEO and Co-Founder Yoni Assia who published it as an article ‘The Visible Hand‘, outlining the basic framework of this new global and open-source cryptocurrency.

Because it addresses the inequality of wealth, “this project really belongs to everyone” insisted Lee as he rattled off statistics that show 94% of the world’s wealth is owned by the richest 20% – meaning only 6% of the planet’s wealth is shared by the rest of the 80%. Not to mention that the new technological innovations we are now seeing with AI and IoT will inevitably mean that millions of jobs will be replaced by machines in the near future. Suddenly, UBI seems to not just be a sane option to consider but an increasingly unavoidable and urgent solution to the era’s socio-economic woes.

“Wealth Inequality – Problems on the Horizon” – Courtesy of eToro

A DAO Maintained on Blockchain

What GoodDollar has going for it, is its utilization of blockchain technology, specifically smart contracts, in the exchange of money or any source of value, which will implement decentralized, transparent and conflict-free transactions, hopefully solving the challenges of fund governance and accountability. As a Decentralized Autonomous Organization (DAO), it will be an ‘Open-UBI’ controlled by its users, a social governance, unlike a ‘Classic UBI’ which is controlled by a central government, dependent on politics and limited to state or national boundaries. The other interesting feature is its model of decreasing interest rates on larger deposits, with a UBI-distribution mechanism arranged so that interest distributions are of the greatest benefit to the least advantaged – a banking-in-reverse of sorts. Other advantages include the fact that it is easily and globally accessible, it can be exchanged to local currencies and its low transaction fees.

“GoodDollar Experiment: Open UBI on a Global Scale” – Courtesy of eToro

Parting Words

With the radically changing job market conditions, I do believe UBI will gradually not be seen so much as simply a handout but as insurance against an increasingly automated world. In principle, basic income is fixed at a level to allow subsistence but also to encourage enterprise and instill motivation. However, is it sustainable and what might its long-term impact have on future generations?

Harnessing today’s most innovative technologies makes the GoodDollar project head and shoulders above other classic UBI models. It remains to be seen if GoodDollar will get the global support and participation it needs to get it successfully off the ground.